Almost 50% of firms in Asia expect downturn to end by mid-2010
By Desmond Wong, Channel NewsAsia | Posted: 03 November 2009 1923 hrs

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SINGAPORE: Just under half of businesses in Asia are optimistic about an economic recovery and expect to see the negative effects of the global downturn end by the middle of 2010.

These were the findings of a global survey conducted by the Institute of Chartered Accountants in England and Wales (ICAEW).

It said Asian firms are turning optimistic about next year, and the continued expansion plans of Asian respondents showed that companies were not distracted by short-term turbulence.

Dominic Nixon, chairman, ICAEW, Singapore City Group, said: "What Asian companies and businessmen are doing is looking in the medium and long term. This is still quite likely to be the Asian century. The Asian economies are still going to grow. So what companies are doing is putting plans in place to grow over the medium term.

"There may be a V shape, there may be a W shape, there may be whatever shape you may have, but ultimately there will be growth over the medium term and that's what companies are optimistic about."

The ICAEW also said the more open economies of Hong Kong and Singapore need to strike a balance between their international and Asian interests in order to make the most of the region's domestic potential. This is even more critical given the growth of intra-regional trade between Asian economies.

Mark Billington, regional director, Southeast Asia, ICAEW, said: "It's something that they see as very beneficial. Look at what's been happening recently with the Australian economy, you look at the growth in China, and the continued support across territories through intervention by governments to ensure that trading ability is maintained.

"It's very much focused on how Asia as a whole can come out of this and not have to rely on the consumers in Europe, in the UK and in the US." He added that this will also allow Asia to reduce its reliance on consumers in markets in Europe and the US.

The survey also showed that 97 per cent of Singapore businesses considered their domestic economy "very business friendly", compared to 88 per cent in Hong Kong, and 84 per cent in neighbouring Malaysia. - CNA/vm